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Serum's COVID vaccine 'costlier' in India, explained

State govts may end up paying more than foreign govts for Covishield

Salil-oxford-covishield-serum-vaccine-vial-vaccination-2 Covishield, the vaccine developed by Astrazeneca and Oxford University, and contract-manufactured at SII | Salil Bera

Despite being manufactured in India, state governments will have to shell out more than foreign governments to directly procure Covishield from Serum Institute of India (SII). Effectively, this means that if the state governments are not ready to absorb the cost of the vaccine, Indians getting their jabs at a state government facility will have to pay more than their peers in countries such as Bangladesh, Mexico, Nepal, Brazil, Palestine, Sri Lanka, Saudi Arabia and South Africa. 

On Wednesday, Pune-based SII stated that coming May 1, Covishield will be sold at Rs 400 (approximately $5.5) to state governments and at Rs 600 (~ $8.3) to private hospitals. In comparison, data available from UNICEF's Covid-19 vaccine market dashboard reveals that countries such as Mexico, Nepal and Bangladesh procure the vaccine from SII at $4 per dose, while the price is around $5 for Brazil, Palestine, South Africa, Sri Lanka and Saudi Arabia. In most of these countries, the shots are being administered for free, with the governments absorbing the costs.

The vaccine, developed by Astrazeneca and Oxford University, is being contract-manufactured at SII. The same vaccine, when procured directly from the vaccine developer AstraZeneca, is being retailed at a range of $2-$4 per dose to European Commission, Latin America and the US. 

Justifying the higher rates, SII CEO Adar Poonawalla had recently said his firm has to pay 50 per cent royalty to Astrazeneca. 

Meanwhile, responding to an Indian Express report on higher market pricing of Covishield in India, the Union Health Ministry tweeted on Saturday: "It is clarified that govt of India’s procurement price for both #COVID19 vaccines remains Rs 150 per dose. GOI procured doses will continue to be provided TOTALLY FREE to States (sic)." 

Questions remain

However, the ministry's assurance falls short of answering a few questions. While the Centre has reiterated that it will be buying the vaccine at Rs 150 (~ $2) per dose from SII, the distribution metrics of how many will each state receive is still unanswered. For instance, how many doses will the Centre be distributing to say Uttar Pradesh or Kerala or West Bengal? Clearly, the Centre's quota will only cover a small percentage of the states' total requirement. 

The Centre's plan is to allot 50 per cent share to states based on the extent of infection (active cases) and performance (speed of administration). 

So far, the Centre procured from SII and distributed it to the states. However, from May 1, the supply will be divided into two baskets: 50 per cent for the Centre, and 50 per cent for states and private players. 

According to India's new vaccination policy, free vaccination would be available at all vaccination centres that receive doses from the Central government. These doses will be used to vaccinate healthcare workers, frontline workers, and those above 45. 

At the same time, the 50 per cent basket set aside for states and private hospitals in the open market will be used to vaccinate those above the age of 18 years. It is here the pricing factor features in. With private hospitals getting a free hand to fix their own prices for the vaccine from May 1, the cost of vaccines at such facilities will go higher. 

And those going to state government facilities will be expected to pay Rs 400 per dose from their own pockets if the state governments do not subsidise the cost. So far, states such as Uttar Pradesh, Chhattisgarh, Bihar, Kerala, Madhya Pradesh, Assam, Goa and Sikkim have promised free vaccination for all above 18 years at state government facilities. 


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